Home > sector analysis > EU’s possible support of Greece leads to rallies in US markets

EU’s possible support of Greece leads to rallies in US markets


The Greeks are known for many things. The Parthenon, Pythagorean theorem, mischievous God’s and a debt crisis that is moving the US markets. In this week alone, the market has rallied on news that the EU would help Greece with its debt.

Wednesday, Feb. 9, at 11:45 am the SPY (chart below) reversed their downtrend on the day and bounced from their lows of 106.27 to make new highs at 108.15 ($1.88 or 1.74%.) This 45 minute move was based on unfounded rumors the EU would help out Greece.

Thursday, after an announcement from Brussels that no resolution was made, the SPY bounced from 106.62 to it’s high of the day of 108.25($1.63 or 1.5%.) Again, nothing has been decided although the EU is pledging support.

The dollar, which was gaining strength against the EUR/USD (chart below), initially bounced after the news, but then came back in as it was found to be “premature.” The EU is looking to give in-direct aid, but there won’t be any more details until sometime next week. As of this writing, the EURO is continuing to give up ground to the dollar.

The biggest gainers in US equities on the strengthening dollar have been basic materials. Although the overall sector has been the weakest over the last month down -9.2%. This week it is up 3.7% and more than any other sector. Today it was up 2.7%. (Bar Graph Below)

AK Steel Holding Corp (AKS) was up today 4.74%. It found resistance at it’s 50-day moving average. I will be monitoring it closely to see if it continues to rally as well as paying attention to the EUR/USD.

Shaded areas represent the volatility to the upside in the market.

The dollar is clearly getting stronger against the EURO

Week performance

Day Performance

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